{"id":11293,"date":"2024-02-05T10:26:57","date_gmt":"2024-02-05T14:26:57","guid":{"rendered":"https:\/\/archive-lynchlaw.pfgsandbox.com\/?p=11293"},"modified":"2024-02-05T10:27:25","modified_gmt":"2024-02-05T14:27:25","slug":"employee-or-independent-contractor","status":"publish","type":"post","link":"https:\/\/archive-lynchlaw.pfgsandbox.com\/?p=11293","title":{"rendered":"Employee or Independent Contractor?"},"content":{"rendered":"

In a pivotal move, the U.S. Department of Labor (DOL) announced a final rule<\/a> on January 9, 2024, set to take effect on March 11, 2024. This rule fundamentally revises the guidelines for classifying workers as employees or independent contractors under the Fair Labor Standards Act (FLSA).<\/span>\u00a0<\/span><\/p>\n

The Fair Labor Standards Act is a federal law that establishes <\/span>minimum wage<\/span><\/a>, <\/span>overtime pay<\/span><\/a>, <\/span>recordkeeping<\/span><\/a>, and <\/span>child labor<\/span><\/a> standards for full and part-time employees in both the public and private sectors. One of the challenges of this law is that it does not define an \u201cindependent contractor,\u201d thus creating the need for such rules by the Department of Labor.<\/span>\u00a0<\/span><\/p>\n

What is Different?<\/span>\u00a0<\/span><\/h3>\n

The new rule, in alignment with longstanding judicial precedent under the FLSA, offers new guidance for determining whether a worker may be classified as an employee or an independent contractor. In doing so, DOL shifts away from the 2021 Independent Contractor Rule which allowed for a much looser analysis. By taking a more complete picture of the employee dynamic, the Department of Labor hopes to mitigate the risks associated with misclassifying employees as independent contractors. Such risks can include jeopardizing workers\u2019 rights to minimum wage and overtime pay, wage theft, and more.<\/span>\u00a0<\/span><\/p>\n

Key Aspects of the Rule:<\/span>\u00a0<\/span><\/h3>\n

Multifactor Economic Reality Test.<\/h4>\n

The DOL determined that a worker cannot be considered an independent contractor \u201cif they are, as matter of economic reality, economically <\/span>dependent on an employer for work.<\/span><\/a>\u201d That dependence will now be determined by six factors including:<\/span>\u00a0<\/span><\/p>\n